Patel Engineering (PATEN)
Patel Engineering (PATEN)
Patel Engineering (PATEN)
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Exhibit 10: On-going irrigation projects<br />
Project State Client Value (Rs<br />
crore)<br />
Bhima Lift Irrigation Project, Lift-I, Andhra<br />
Pradesh<br />
Kalwakurthy Lift Irrigation Project, Stage-<br />
I Pumping Station with 5 x 30MW Pump<br />
Motors<br />
Jawahar Lift Irrigation Project, Stage-I &<br />
II<br />
Source: Company, ICICIdirect Research<br />
Andhra<br />
Pradesh<br />
Andhra<br />
Pradesh<br />
Irrigation & CAD<br />
Department, Andhra<br />
Pradesh<br />
Irrigation & CAD<br />
Department, Andhra<br />
Pradesh<br />
Irrigation & CAD<br />
Department, Andhra<br />
Pradesh<br />
Road and transport: Moving towards annuity based projects<br />
According to Crisil, over the next five years, investment in the roads sector<br />
is expected to increase at a CAGR of 24%. During this period, it is expected<br />
that investments amounting to US$19 billion would be incurred on roads<br />
related projects. Private investment is expected to bring in US$1.8 billion<br />
as an equity component in respect of the NHAI BOT projects that are<br />
expected to be awarded in the next five years.<br />
<strong>Patel</strong> has a considerable experience in various segments in building<br />
highways, tunnels and flyovers. Recently it has started focusing on annuity<br />
projects and BOT projects, whereas earlier it was focusing on cash<br />
projects. This move will provide a lot of stability towards the cash flows<br />
and thus will give impetus to the company for future projects.<br />
<strong>Patel</strong> currently has two projects underway which are on annuity based and<br />
these projects are low risk as the company is assured of fixed annuity<br />
payment irrespective of the traffic movement and toll collection. These<br />
projects will provide the stability to the cash flows. In this case, the only<br />
drawback is that the margins are on the lower side.<br />
Exhibit 11: Annuity-based road projects<br />
Project cost (Rs<br />
Project Length ( km)<br />
crore) Debt to equity<br />
AP7 61 600 3 to 1<br />
KNT 1 53 440 3 to 1<br />
Source: Company, ICICIdirect Research<br />
Exhibit 12: Order book for road and transport projects (Rs crore)<br />
Mar 31, 2005 100<br />
Mar 31, 2006 850<br />
Mar 31, 2007 1180<br />
Dec 31, 2007 1265<br />
Source: Company, ICICIdirect Research<br />
6 | P age<br />
210<br />
480<br />
640<br />
<strong>Patel</strong>’s order book has been<br />
growing consistently
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